What to Do When You Made an Error on Your Taxes

Ok, first off breath.  Deeply.  These things just happen once in a while.  Really it is ok.  Strangely enough the Canadian Revenue Agency (CRA) isn’t going to eat the fresh from your bones when you make a typing error or copy the wrong number down.  They may not be all that happy, but they won’t eat you.

To deal with the situation you fill out one of these and then send it off the CRA if you have received your notice of assessment back.  If you haven’t got your assessment back I would suggest just waiting, they might just find your error themselves and adjust it for you.

Yet before you start all this paperwork keep in mind the last item on your T1 tax form.  The CRA doesn’t issue refund or collects money on balances less than $2.  It simply isn’t worth their time to fix errors that small.  So if it is a truly minor error, forget about it.

On the other hand if you feel the CRA has made a mistake you might want to consider reading this and talking to them.  If that doesn’t help you might want to consider bringing in a tax professional to deal with the mess.

Overall you need to remember that you have to document everything when dealing with the CRA and when you do talk to people get their full name and phone number so you can talk to them again if you need to.  The idea is to cover your ass and make sure you can prove everything in court if need be.

Of course keep in mind I’m not a tax professional.  The above is only my own opinion and should not be considered advice. 

7 thoughts on “What to Do When You Made an Error on Your Taxes”

  1. Looking back over a couple previous years of tax returns from my accountant and realized he missed some of my deductions. Nothing major, just minor medical expenses. Do you think it’s worth filing? Will they even reassess and send a refund for a couple years if the amounts are relatively small?

  2. Based on personal experience it is EXTREMELY important to get the full names and #s of people that you deal with over the phone. I have been told completely different information from 2 agents at the phone line at CRA and the onus is on you to prove whatever you say.

  3. Amending a tax return is actually a pretty easy process – if you’ve signed up for the CRA “My Account” feature on their web site, you can even make the amendments online.

    And yes, they DO send out extra refunds if you’re entitled to extra cash, as long as the amount is over $2. Jordan: Do the math and figure out how much the refund will be – whether it’s “worth filing” will depend on how much you’ll get back, how much time it’ll take to do the paperwork, and what value you place on your time.

    As to the information received on the phone by CRA representatives, bear in mind that even if you get their full names, if they give you incorrect information it’s still YOUR problem to ensure you file your taxes correctly. The Income Tax Act and regulations (incomprehensible as they may be) are the source of all the tax rules, and that legislation trumps anything that a CRA staffer might say to you.

  4. My business has to file taxes for 2003-2006 so I gave all my accounting documents and receipts to an accountant for my small business and he lost all of the expense documents! He’s procrastinated on my file for 2 years and finally CRA HAND-DELIVERED a letter to my business inquiring as to why the taxes haven’t been filed. I told my accountant to get his butt in gear and he said he talked to CRA and told them he ‘misplaced’ my tax stuff. CRA said to make estimates on the expenses. So I ended up doing all of the work (calculating the income and estimating the expenses) for the 4 years. The accountant is willing to reduce his fees by like $100 which is rubbish! I wonder if anyone has any advise about what to do??

  5. Kris,

    WOW! That sucks! I would say your accountant failed to do his job. Is he any good at your taxes beyond this mistake? If so you might want to just pay him and keep going. Otherwise complain more and say his $100 off is nuts.

    Just my thoughts,

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